It’s been a while since I wrote my last blog. The reason is simple: I didn’t want to change my stance without witnessing any veritable evidence—evidence I couldn’t find. The message was loud and clear: the weakness in the stock market may persist for a prolonged period, given the then‑declining trend in the PE ratio.
Beyond the weakness visible on the charts, macroeconomic factors such as Middle East tensions have further deteriorated the fundamentals. I’m not an economist, but elevated crude prices clearly pose a risk to the Indian stock market.
Technically, on the weekly chart over the past six years since the lockdown, the NIFTY has breached below the 50‑week SMA (black line) three times, as indicated by the thick blue arrows. Each time, it bounced back quickly and resumed its uptrend above the 50‑week SMA. However, since breaking below the 50‑week SMA in March 2026, as shown by the red arrow, the NIFTY has faced stiff overhead resistance at the same level, highlighted by the purple arrow.
Nevertheless, amid so much uncertainty, the silver lining is the long‑term support—the 200‑week SMA (blue rising line)—which may act as a strong cushion. Given the market’s tendency over the past few years, the NIFTY may bounce sharply from current levels if macroeconomic conditions ameliorate. Nevertheless, the caveat remains: if this is a structural long‑term shift in trend, I won’t be surprised to see significantly lower levels.